BIZCHINA / Finance
Securities Law of the People's Republic of China (revised in 2005)
Updated: 2006-04-18 08:56
Article 115 A stock exchange shall exercise a real-time monitoring of
securities trading and shall, according to the requirements of the
securities regulatory authority under the State Council, report any
abnormal trading thereto. A stock exchange shall carry out supervision
over the information as disclosed by a listed company or the relevant
obligor of information disclosure, supervise and urge it/him to disclose
information in a timely and accurate manner according to law. A stock
exchange may, when it requires so, restrict the trading through a
securities account where there is any major abnormal trading and shall
report it to the securities regulatory authority under the State Council
for archival filing.
Article 116 A stock exchange shall withdraw a certain proportion of funds
from the transaction fees, membership fees and seat fees as charged
thereby to establish a risk fund. The risk fund shall be subject to the
administration of the council of the stock exchange. The specific
withdrawal proportion and use of risk fund shall be provided for by the
securities regulatory authority under the State Council in collaboration
with the fiscal department of the State Council.
Article 117 A stock exchange shall deposit its risk fund into a special
account of its opening bank and may not unlawfully misuse it.
Article 118 A stock exchange shall, pursuant to laws and administrative
regulations of securities, formulate the rules on listing, trading and
membership administration as well as any other relevant rules, and shall
report them to the securities regulatory authority under the State
Council for approval.
Article 119 Any person-in-charge and any other practitioner of a stock
exchange that has any interest relationship or any of his relatives has
any interest relationship with the performance of his duties relating to
securities trading shall withdraw.
Article 120 Any trading result of a transaction, which has been conducted
in accordance with the trading rules as formulated according to law, may
not be altered. A trader who has conducted any rule-breaking trading may
not be exempted from civil liabilities. The proceeds as generated from
any rule-breaking trading shall be dealt with pursuant to the relevant
regulations.
Article 121 Where any staff of a stock exchange who is engaged in
securities trading violates any trading rule of the stock exchange, the
stock exchange shall impose him disciplinary sanctions. Under any serious
circumstances, the qualification thereof shall be revoked and the
violator shall be prohibited from entering into the stock exchange to
engage in any securities trading.
Chapter VI Securities Companies
Article 122 The establishment of a securities company shall be subject to
the examination and approval of the securities regulatory under the State
Council. No entity or individual may engage in any securities business
without the approval of the securities regulatory under the State Council.
Article 123 For the purpose of the present Law, the term "securities
company" as mentioned in the present Law refers to a limited- liability
company or stock-limited company that has been established and engages in
business operation of securities according to the Corporation Law of the
People's Republic of China as well as the provisions of the present Law.
Article 124 The establishment of a securities company shall fulfill the
following requirements:
(1) Having a corporation constitution that meets the relevant laws and
administrative regulations;
(2) The major shareholders having the ability to make profits
successively, enjoying good credit standing and having no irregular or
rule-breaking record over the latest 3 years, and its net asset being no
less than 0.2 billion yuan.
(3) Having a registered capital that meets the provisions of the present
Law;
(4) The directors, supervisors and senior managers thereof having the
post-holding qualification and its practitioners having the qualification
to engage in securities business;
(5) Having a complete risk management system as well as an internal
control system;
(6) Having a qualified business place and facilities for operation; and
(7) Meeting any other requirement as prescribed by laws and
administrative regulations as well as the provisions of the securities
regulatory authority under the State Council, which have been approved by
the State Council.
Article 125 A securities company may undertake some of or all the
following business operations upon the approval of the securities
regulatory authority under the State Council:
(1) Securities brokerage;
(2) Securities Investment consulting;
(3) Financial advising relating to activities of securities trading or
securities investment;
(4) Underwriting and recommendation of securities;
(5) Self-operation of securities;
(6) Securities asset management; and
(7) Any other business operation concerning securities.
Article 126 A securities company shall indicate the words
"limited-liability securities company" or "stock-limited securities
company" in its name.
Article 127 Where a securities company engages in the business operation
as prescribed in item (1), (2) or (3) of Article 125 of the present Law,
its registered capital shall be RMB 50 million yuan at the least. Where a
securities company engages in any of the business operations as
prescribed in item (4), (5), (6) or (7), its registered capital shall be
RMB 100 million yuan at the least; Where a securities company engages in
two or more business operations as prescribed in item (4), (5), (6) or
(7), its registered capital shall be 500 million yuan at the least. The
registered capital of a securities company shall be the paid-in capital.
The securities regulatory authority under the State Council may,
according to the principals of prudent supervision and in light of the
risk rating of all business operations, adjust the requirement of minimum
amount of registered capital, which shall be no less than the minimum
amount as prescribed in the preceding paragraph herein.
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